June 2018 (Journal of Accounting, Finance and Economics)

June 2018 (Journal of Accounting, Finance and Economics)

Total Articles - 7

Pages 1 – 19

Author: Surajit Sarbabidya and Trina Saha

Stock market is one of the attractive places for investment among the investors of Bangladesh. There are two stock exchanges namely Dhaka stock exchange (DSE) and Chittagong stock exchange (CSE). People invest their money in both primary and secondary market(s) for the purpose of gaining profit. But the investment situation was not good in Bangladeshi market in the recent past. The investors witnessed two severe stock market crashes in Bangladesh in the years 1996 and 2010. Since then investors encountered much frustration due to gambling, syndication, insider trading, enactment of many laws and their short term and sudden but adverse effect, fluctuating and volatile market conditions, rumor, etc., in freely investing their hard money in this market. This has negatively impacted the natural and stable growth of investment in this market. The main objective of the study is to examine the factors affecting investment decisions in the stock market from the perspectives of Bangladesh. The present study is the result of the collection of both primary and secondary data and their analyses of which the primary data have been collected from the sample size of 100 respondents using ‘random sampling’ method through survey on investors of brokerage houses in Chittagong and Comilla. A structured self-administered questionnaire comprising of closed (i.e., dichotomous – yes/no), open-ended, non-forced, balanced and odd numbered noncomparative itemized questions using Likert 5 rating scale of measurement has been used for the survey. On the other hand, secondary data have been collected through extensive literature review. In this regard, recent articles and research papers published in the referred journals and peer reviewed international conference proceedings, survey reports, internship reports, annual reports and sustainability reports of the operators, web sites, newspapers, etc., relevant to the literature of the subject matter have also been studied. The study found relationship between the factors and investment decisions. The factors including risk factors, stockholder’s whimsical attitude, earning per share, political instability, uncontrollable macroeconomic factors, etc. have been found damaging and demotivating the investors of the stock market in Bangladesh unless effective measures will be taken to correct the same.

Pages 20 – 39

Author: Salma Begum and Syed Yusuf Saadat

The unpaid labor of women in any country holds substantial economic value. This research aims to estimate the value of time for non-working women in Bangladesh, and the wage rates that they would face in the labourmarket. In this quest, it generates the probability that a woman works, her shadow wage, and her offered wage from a set of common parameters. This paper adopts the approach utilized in Heckman (1974, 1976, and 1979) and applies it in the context of Bangladesh by utilizing cross sectional data that was collected as part of the Bangladesh Quarterly Labor Force Survey 2015. There has been no research on estimating the value of non-working women’s time in Bangladesh using the econometric methodology that has been used in this paper. This study aims to fill in this research gap by conducting a systematic investigation on the unpaid labor of women in Bangladesh. The results of this study show that there is a negative and statistically significant relationship between the number of children and a woman’s probability of working. A woman’soffered wageis found to have a positive and statistically significant relationship with her years of schooling. The findings of this study provide hard evidence of the economic contribution of women in Bangladesh. The recognition that the unpaid labor of women has economic value is the stepping stone towards greater female empowerment.

Pages 40 – 58

Author: Sakib B. Amin and Muntasir Murshed

The efficacy of foreign aid inflow with regards to dictating the development of the recipient nations is often questioned in the light of the Dutch disease problem whereby a surge in such inflows tend to appreciate the respective real exchange rates of the recipient nations,bottlenecking their export competitiveness. Against this prelude, the main aim of this paper is to investigate the causal relationship between FAID inflow and RER movements in context of the four SAARC countries that have been traditionally dependent on foreign development assistance. The countries considered in this paper include Bangladesh, India, Pakistan and Sri Lanka. The econometric model is structured using a multivariate framework incorporating annual time series data of all these four nations from 1980 to 2014. Following Edwards (1989) and Montiel (1999), real exchange rates were expressed as country-specific functions of foreign aid and other real fundamentals as control variables. Augmented Dickey-Fuller unit root test, Johansen cointegration test, vector error correction model approach and Granger causality test are considered. Thecorresponding results reveal that both in the cases of Bangladesh and India, the inflow of foreign aid in the form of official development assistance isstatistically insignificant in explaining the movements in the respective real exchange rates, neither in the short run nor in the long run. A possible reason behind this similarity could be the fact that the central banks in both these nations managed to maintain a strong grip over their exchange rates which worked as a cushion against RER misalignments and avoided Dutch disease problems in these countries. In contrast, foreign aid inflows are found to stimulate appreciative pressures on the real exchange rates of Pakistan and Sri Lanka, imposing the threats of potential Dutch disease problems within these nations.

Pages 59 – 70

Author: Nuren Nirvana Brishti

The Gender Responsive Budget (GRB) is widely recognized as an effective tool to study for gender inclusive development, which in turn will create an endeavor on the improvement of socio-economic factor, economic growth and a sustainable long-term development. Being a developing country, Bangladesh has overcome some major constrains in gender issues along with a spectacular progress in female education, maternal health, female participation in the labor force, mitigating poverty via empowering women, political and electoral participation of women; internationally which has been highly appreciated. The government of Bangladesh has highly prioritized the gender budgeting policy, which is thought to be one of the major causes behind this huge success. This study has worked out a splendid compatibility of national budget and gender budget, over the period and has concluded, that the government of Bangladesh is progressively turning pro gender. Moreover, based on the data on the category of female, primary school enrollment, life expectancy at birth, fertility rate and labor force participation; are examined with HDI (Human Development Index). Which suggests improvement in the gender budget may have a major impact onraising the value of HDI, as both are following an increasing trend.

Pages 71 – 84

Author: Farhan Khan, Maayesha Tasneem Chowdhury and Sakib B. Amin

Oil price is known for its volatility and due to the sudden fluctuation of oil price, developing countries are affected more than the developed countries. To the best of our knowledge, no studies have been conducted to investigate the relationship between oil price and renewable energy consumption in Bangladesh and so the aim of this paper is to analyze how oil price impacts renewable energy consumption with the help of time series data (1980-2015). Johansens conintegration test reveals that our variables are cointegrated and Granger causality test results show a unidirectional causality is running from renewable energy consumption to oil price in the long run. Through Vector Error Correction Model (VECM) we found no causality in the short run. CUSUM and CUSUMSQ test was employed to check the stability of the model and results show that the model is stable. Dynamic Ordinary Least Square (DOLS) approach being used for long run estimation and we found that the coefficient of oil price is positive and inelastic as well. Thus proper policies should be taken to develop the renewable energy sector to reduce the effects of oil shocks in Bangladesh.

Pages 85 – 97

Author: Umme Marzana and Sakib B. Amin

This paper attempts to tap into some unexplored areas of Bangladesh’s development by analyzing the relationship between aggregate and disaggregate sources of energy usage and socio-economic development. We have conducted a series of tests in this paper to analyze the variables from 1985 to 2014. Our results reveal that both aggregate energy and disaggregate energy Granger cause GDP growth. It is also found that electric power consumption per capita and energy use per capita both Granger cause life expectancy, whereas only electric power consumption per capita Granger causes household final consumption expenditure growth and energy use per capita Granger causes infant mortality rate.

Pages 98– 110

Author: Ayateena Ali and Sakib Bin Amin

This research paper empirically investigated the cointegration and causal relationship between trade openness and industrial growth in Bangladesh economy using annual data from 1980 to 2016. Trade normally defined as the buying and selling of goods and services and when there is trade, it acts as a growth for many countries in developing industries. As there have been many studies relating to this topic, maximum studies showed that there is a causal relationship between trade and industrial growth. To check the causal relationship in the context of Bangladesh, the main variables that have been taken are- Industrial growth, Capital, Labor and Trade. By employing the cointegration and Error Correction Model approaches (ECM), the empirical results suggest that there is an existence of a unique long run relationship. The hypothesis of this research is, ‘Trade liberalization leads to rise in industrial growth. The Augmented Dickey Fuller (ADF) test has been used to check if the variables are stationary. Next, to check the robustness of the relationship among the variables, the Johansen cointegration method has been applied followed by the Vector Error Correction Model (VECM) which also haveestimated in order to determine the shortrun dynamics behavior and lastly Granger causality test has been applied to check the long runbehavior. The results show that bidirectional causality exists in short run and unidirectional causality exists between trade and industrial growth in the long run. Therefore, this proves the support of the hypothesis of this research paper for the economy of Bangladesh.

Total Articles- 7

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